TWO IN ONE: AFFLUENTS AS ACTIVE CONSUMERS AND INSPIRED TRENDSETTERS

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1 Data sources

Premier RusIndex

Premier: upper middle class survey. Analyzing brands, RusIndex is a quarterly all- survey of goods and services, oriented to high income consumers. goods and services consumption and media audience. • Russian cities 1 mln+ • Russia’s cities with 100,000 + • Sample - 2 500 respondents per year population. • 18-65 years old, income: - over 70 thousand rub. p/month; St Petersburg – over 60 thousand rub. p/month; • Sample ~25 000 respondents per year other cities – over 50 thousand rub. p/month • High socio-economic status (based on SEL) Read more • Read more

2 How we define affluents In the Premier survey

• High level of income (enough money for buying large appliance and up)

• Higher education

• Owns certain property (car, country house, etc.)

• Enough money for active living and extra services (visiting restaurants every week, flights, travelling abroad, active leisure in city of living – theatres,, galleries, concerts)

3 Affluents’ portrait in Russia Average residents of cities Audience of the Premier survey 1 million +, 18-65

95% Work 73%

76% Main income receiver 56%

99 624 rub. Average personal income 38 637 rub.

17% Individual entrepreneur 7%

35% Mid level manager 12%

16% Top manager 4% Premier’ 2018 RusIndex’ 2018 4 Affluents’ contribution to economy significant purchasing power

Have a car in a household 96% 37%

Have dishwasher 54% 19%

Have bank deposits 73% 18% Premier 2018

Have insurance policies 46% RusIndex 2018 11%

Drink premium spirits (rum, whiskey, 59% tekila, gin) 9%

Buy clothes of luxury brands 47%

Source: Ipsos. RusIndex: Russians aged 18-65, cities 1 mln+ 5

5 Why are they important to us? NOVATORS «I buy new goods and products earlier than most of my familiars» Premier 33% RusIndex* 9%

OPINION LEADERS Communicative group Word of Mouth: Opinion leadres All* 17% High income** 21%

*RusIndex: Russians 18-65, cities 1 mln+ ** RusIndex. High income = top 10% of population on persona income

6 Key trends

Mixing brands and price segments

Expect from brands to be responsible in environmental and ethical issues Prefer to spend money on experiences over things

7 Mixing brands and price segments

8 • Not-demonstrative luxury • Personality is more valuable than things

9 Not crazy about luxury cars

68% One car in a household

TOP-4 car brands … 28% 1. Toyota Two ore more cars in a household 2. Nissan

3. Ford

4. Volkswagen Source: Premier’2018

10 Choose alternative ways of transportation – taxi, carsharing, etc.

«I have sold my car thousand years ago Scooters, and drive around the segways, city by taxi, subway gyroscooters, or car sharing. I go to bicycles for work on Yandex.Taxi rental, as a way business class. It is to get to the much cheaper than auto ownership». subway station or to move around the city

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11 Make everyday purchases in mass market chains

Pyaterochka Premier 2018

Premier 2017

Perekryostok

Vkusvill

Azbuka Vkusa

Globus Gurme

Source: Premier 2017, 2018. Moscow

12 Mixing brands and price segments

Denial of demonstrative behavior and even condemnation of demonstrativeness: • The value of quality, naturalness and functionality of things comes to the fore • Moving towards “affordable luxury” and “budget premium” • In the center of attention – a person, not what he/she consumes

13 Expect from brands to be responsible in environmental and ethical issues

14 The most important environmental issues

Global Russia

48% 34% 46% Dealing with waste

41% 35% 38% Air pollution

39% 25% 37% Water pollution Russia. 22% Households: Poor quality drinking water 13% 26% High income

Over-packaging of consumer 13% Middle income 15% 11% goods Low income

Source: Ipsos. How does the world perceive our changing environment? Base: 19,519 online adults aged 16-74. 27 countries. Feb 22 – March 8 2019

15 Non-Recyclable Product Waste

Global Russia

Companies that produce 37% 20% 34% packaged goods

14% 14% 15% Government Russia. Companies that sell packaged 8% Households: 9% 8% goods High income

2% Middle income Consumers 9% 2% Low income 34% 39% 35% All of the above equally

Source: Ipsos. How does the world perceive our changing environment? Base: 19,519 online adults aged 16-74. 27 countries. Feb 22 – March 8 2019 Q: Who if anybody do you believe should take most responsibility for finding a way to reduce the amount of unnecessary packaging which is sold?

16 Non-Recyclable Product Waste What kind of policy action should be taken? Global Russia

Forcing government spending to improve the range of 67% 46% 66% recyclable items

The government "naming and shaming" shops that 28% 26% 27% use a lot of these products

23% 33% 20% Taxing shops that use these products Russia. Households: 21% High income 27% 17% Public information campaigning Middle income Low income 11% 24% 9% Fining households that do not recycle enough

Source: Ipsos. How does the world perceive our changing environment? Base: 19,519 online adults aged 16-74. 27 countries. Feb 22 – March 8 2019

17 Non-Recyclable Product Waste What personal actions are citizens taking? Global Russia 52% Re-using disposable items 56% 51%

44% Buy products made from recycled materials 51% 40%

33% Stop buying goods that have non-recyclable 38% 31% packaging Russia. Households: 8% High income 20% 7% Stop going to shops that use a lot of non- recyclable packaging Middle income Low income Source: Ipsos. How does the world perceive our changing environment? Base: 19,519 online adults aged 16-74. 27 countries. Feb 22 – March 8 2019

18 Expect from brands to be responsible in environmental and ethical issues

Ready to change themselves, but are waiting for proactivity in socially active behavior: • primarily from manufacturers of goods and from services providers, • secondly – from retailers • and only in last place is the responsibility of the consumers themselves.

19 Prefer to spend money on experiences over things

20 Prefer to spend money on experiences over things

71% Travelled outbound of Russia and CIS 14%

35% Premier’18 Visited city amusement parks 25% RusIndex’18 Visited museum, gallery or exhibition 17% center 6%

52% Visited cinema 17%

26% Visited excursions 11%

29% Visited musical concert 10%

28% Watched sports competition 11%

21 Work-family balance

«I spend a lot of time to arrange my family life» 51,0

44,6

Premier 2015 Premier 2018

22 Prefer to spend money on experiences over things

What does the affluent consumer look for today? • Comfort, service, style, design, convenience • Humor, emotions, stories, legends, True Stories, the idea of freedom • Communicating with family and friends, including offline • Connecting goods with positive emotions and impressions, interactivity and extension of the experience after purchase

23 Media consumption

The Internet is the main media channel for the upper segment of the middle class.

97% of the Premier audience use Internet @ daily TOP most visited sites Vkontakte.ru / Vk.com Hours spent Youtube.com per day online Facebook Instagram

9 Active communicators

Social media

Blogs, micro blogs (LJ, Twitter, etc.) Web messangers (ICQ, Skype, Viber, etc.) Forums

Source: Premier’ 2018

24 Comprehensive analysis of the target audience Features Premier. Targeted marketing Family, work, Media preferences, social environment Attitude to ads Personality, motivation

Consumer Lifestyle, behavior leisure activities

Financial behavior

25 Search for effective communication channels Solvable tasks

INTERNET TELEVISION RADIO PRESS

ADDITIONAL COMMUNICATION CHANNELS OUTDOOR INDOOR TRANSPORT (train stations, airports, etc.) (cinema, leisure places) (subway, urban ground transportation)

26 New data of the Premier’2019 survey

27 Questions?

Tatyana Gerasimenko Mila Novichenkova Associate Client Service Director Head of Marketing and Communications

[email protected] [email protected] (495) 981 5646 доб. 2647 (495) 981 5646

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